From that link
Today on CNN, Erin Burnett reported that she spoke with an investor who talked directly with the credit ratings agency Standard & Poor’s.
You have a politician, claiming to have talked with someone who talked with someone...
Wow what solid evidence of your point... Not even hearsay one level away, its multiple levels. And even if someone at S&P actually did say such a thing the statement doesn't necessarily reflect the reality of S&P's opinions or esp, future actions.
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President Obama says no to a bipartisan debt limit plan
Posted July 25, 2011 • 
Last Friday the President said:
So here’s what we’re going to do. We have now run out of time. I told Speaker Boehner, I’ve told Democratic Leader Nancy Pelosi, I’ve told Harry Reid, and I’ve told Mitch McConnell I want them here at 11:00 a.m. tomorrow. We have run out of time. And they are going to have to explain to me how it is that we are going to avoid default. And they can come up with any plans that they want and bring them up here and we will work on them. The only bottom line that I have is that we have to extend this debt ceiling through the next election, into 2013.
Yesterday there was a tentative agreement among Speaker Boehner, Senate Majority Leader Reid, and Senate Minority Leader McConnell on the outline of a bill to increase the debt limit and cut spending.
This tentative agreement would increase the debt limit by about $900 B to $1 T, enough to make it into the first quarter of next year, packaged with a bit more than $1 trillion of spending cuts, discretionary caps, and no tax increases. There would be a second debt limit extension next year that would go into 2013, upon action of a joint committee of Congress that would make recommendations for further deficit reduction.
While this is inconsistent with the President’s Election Day demand, a debt limit increase that lasted into next year would be routine based on historic practice.
Senate Majority Leader Reid took this to the White House yesterday and the President rejected it. Leader Reid left that meeting and said publicly that Senate Democrats would instead pursue a different plan that would increase the debt limit by $2.7 trillion, enough to get into 2013. Leader Reid says his plan would cut spending by at least $2.7 trillion (I am skeptical).
It appears the three key Congressional leaders on both sides of the aisle reached a tentative agreement yesterday and the President blew it up.
The President and his advisors have said two things that are consistent but separable:
- the President opposes an extension that would not go past Election Day; and
- such an extension could not pass the Senate because of Democratic opposition.
Assuming that Leader Reid did not bring to the President yesterday a proposal that he opposed, the second no longer appears to be true.
Administration officials from the President on down continue to warn us of the grave consequences if Congress does not act before an August 2nd deadline. Last week the President increased his demands of Speaker Boehner on taxes, knowing that doing so would cause negotiations on a big deal to collapse. Yesterday the three key Congressional leaders tried to act on a bipartisan basis and the President stopped them.
I expect House Republican Leaders to turn the tentative Boehner-Reid-McConnell outline into a bill and try to pass it on the floor in the next couple of days. That’s exactly what they should do.
Update: The House implementation of this would, I expect, also result in House and Senate votes on a Balanced Budget Amendment in the fourth quarter of this year. They’ll have 10 years of discretionary caps with a sequester to enforce them. You can see the outlines of “cut, cap, and balance” without looking too hard. It looks like they’ll also get at least a dollar of spending cuts for each dollar of debt limit increase. I never thought they’d get that.
keithhennessey.com
...The President positioned himself as the aggrieved party, trying to understand what went wrong:
It is hard to understand why Speaker Boehner would walk away from this kind of deal.
I actually think it’s quite easy. The President backtracked in private negotiations this week, demanding bigger tax increases after the Gang of Six, including three conservative Republican Senators, released a plan that raised taxes more than the President had previously demanded...
...Next let’s look at tax rates. The President and the Speaker were negotiating certain parameters that would be agreed to for a future tax reform:
As of last weekend, the President was willing to support three individual tax rates, and the top rate would be less than 35 percent. Team Obama also agreed that the difference between the top individual and corporate rates would be limited.
After the Gang of Six released their plan, the President’s team backed away from this position.
In addition, Team Obama suddenly insisted that refundable tax outlays (for the poor) not be reduced by tax reform.
Again, the President retreated from an earlier position on taxes as a result of the Gang of Six introducing their plan. On total tax revenues, tax rates, and refundable outlays, the President increased his demands last week...
...Negotiation tactics, framing & strategy
While it is an aggressive tactic, there is nothing “wrong” with moving backward in a negotiation. It is likely to anger the counterparty, and it usually reduces the chance of getting a deal. But sometimes conditions change, as they did this week, and one party feels his position is strengthened and thinks he can demand more.
That appears to be the case here. The three conservative Republican Senators who supported a high level of taxes changed the President’s perception of what he could demand on taxes, and especially what he could publicly defend as reasonable if negotiations fell apart. So he backtracked and increased his demand.
At the same time, this has important consequences for those trying to understand why negotiations fell apart.
It shows the President was willing to risk not getting a deal for what he perceived as an improved chance of getting better than his bottom line on taxes. The President’s increased private demands on taxes contradict his public claim that he has been doing everything possible to get a deal.
The President said, “It is hard to understand why Speaker Boehner would walk away from this deal.” No it’s not. The deal the President offered him got worse over the course of the past week.
Imagine the Republican reaction if word had leaked out that the Speaker and Leader Cantor had agreed to a worse tax position than the President had offered them one week prior. There is no way they could take that risk, and the President had to know that. The President made a new demand he had to know Republican Leaders could not possibly accept. The President toughened his position knowing it would cause the talks to fall apart, yet feeling comfortable that he had a stronger rhetorical position explaining the collapse.
The Gang of Six’s efforts have been characterized by some as a shining example of bipartisanship that showed a path forward toward a budget compromise. But because the Gang’s plan was left of the President on taxes, the President backtracked and caused negotiations to collapse. The Gang of Six’s substance and timing helped kill whatever remaining short-term chance there was for a big budget deal.
President Obama used the Gang of Six’s plan as an exit strategy. He backtracked on taxes, knowing this would force the Speaker to abandon negotiations, and knowing he could use the Republican Senators in the Gang to argue from a position of increased rhetorical strength in the ensuing debate. It’s a clever strategy but it belies the President’s public posture.
It seems the President’s own questions should be asked of him:
And so then the question becomes, where’s the leadership? Or, alternatively, how serious are you actually about debt and deficit reduction? Or do you simply want it as a campaign ploy going into the next election?
keithhennessey.com |
